ACCC kills Telstra's transcation cheer

Telstra has been given a double dose of pre-Christmas disappointment by the Australian Competition and Consumer Commission which has thwarted the proposed acquisition by Carsales.com of Trading Post assets from Telstra in addition to delaying Telstra’s acquisition of Adam Internet.

On both counts the regulator has raised concerns that transactions would substantially threaten competition in their respective markets.

The ACCC claims that Telstra’s swoop on Adam Internet would stifle competition in the supply of retail fixed voice and broadband services and has sought further industry consultation.

Meanwhile the regulator has flagged that the Carsales and Trading Post transaction would be detrimental to competition in the automotive classifieds sectors as it would remove one of Carsales’ effective competitors.

Under the original deal in August, carsales.com was set to take over the operations of Telstra’s TradingPost website under classified business unit - quicksales.com.au.

At the time, Telstra Media executive director JB Rousselot described the deal as a key growth opportunity for the TradingPost website. ACCC Chairman Rod Sims views the deals of more of a monopolistic market shift.

“Trading Post is a well established and high profile brand for automotive classifieds advertising and provides an important competitive constraint on Carsales. The proposed acquisition would significantly increase Carsales’ market power and competition would be substantially reduced to the detriment of automotive dealerships and private advertisers,” Sims said.

In opposing the acquisition Sims said concluded that the proposed acquisition would increase the already high barriers to entry for the supply of online automotive classified advertising and give Carsales.com dominant market power.

“The proposed acquisition would further lessen the ability of competing sites to impose a competitive constraint on Carsales, including by reducing their ability to attract inventory and audience,” Sims added.

Carsales.com's chief executive Greg Roebuck said the company was disappointed by the decision, but has yet t reveal if it will work through other transaction options with Telstra. ®